Koskisen sawmill industry volumes increased by 43%

Koskisen sawmill industry volumes increased by 43%, but high timber costs reduced profitability

    The Finnish Koskisen group of companies, engaged in the production of wood products, sharply increased sales in the first half of 2026 due to a significant increase in the supply of lumber. However, this additional volume led to a significant decrease in profits, as high log prices and lower prices for by-products continued to put pressure on the sawmill business.

Financial results for the first half of 2026

    In the second quarter, revenue increased by 16% to 104 million euros, while adjusted EBITDA decreased by about 28% to 7.4 million euros. The EBITDA margin was 7.1% compared to 11.0% a year earlier.

Revenue growth Drivers

1. The growth of lumber supplies
    The main driver of revenue growth was a significant increase in the production and supply of lumber. In the second quarter, shipments increased by 47% to 14.1 thousand m3.

2. Strategic investments in capacity
    Over the past five years, Koskisen has invested almost 90 million euros in the modernization of the Yarvel sawmill. In June 2026, new channel drying chambers were launched, which increased the drying capacity by about 15% and support the strategic goal of increasing annual lumber production from the current 400 thousand m3 to 450 thousand m3.

3. The takeover of Iisveden Metsä
    Starting from June 1, 2025, the group's financial statements include the results of Iisveden Metsä, which also contributed to revenue growth.

Profit pressure factors

    1. High prices for wood raw materials
    Prices for softwood logs continued to rise from an already high level, reaching peaks not seen since 2007-2008. This has become the main factor compressing the marginality of the sawmill business.

    2. Lower prices for by-products
    Prices for energy wood, wood chips and other by-products of sawmilling continued to decline from peak values. This reduced the additional income that usually compensates for high raw material costs.

3. Weak demand in the construction sector
    The construction sector remains sluggish, which limits the demand for softwood lumber and particle boards. This makes it difficult to fully transfer the increased costs to the final product prices.

    4. Operational problems
    In the first quarter, operational difficulties arose at the Yarvel plant, which negatively affected productivity and costs.

Key Koskisen indicators:

Forecast and prospects

    Koskisen confirmed its forecast for 2026: revenue is expected to grow compared to the level of 2025, but the adjusted EBITDA margin will be lower than the 8.1% recorded last year.

    A key factor in margin recovery will be lower prices for logs, which the company expects in the second half of the year. However, risks remain related to the sluggish construction sector and energy uncertainty.

Importance for the global market

    The situation at Koskisen reflects the general problems of the European sawmill industry:

1. - Volume growth does not guarantee profit growth. Increasing production without adequate cost control leads to margin compression.
2. - The shortage of raw materials is a key challenge. High prices for logs in Finland (as well as throughout Europe) make sawmilling an economically difficult business.
3. - Product diversification is critical. By-products (wood chips, pellets) are becoming an important source of income, but their prices are falling, increasing the pressure.
4. - Investing in efficiency is the way to survival. Modernization of capacities allows to reduce average costs, but requires significant capital investments.

Result

    Koskisen demonstrates a paradoxical situation: sales volumes are growing (revenue +19%), but profits are falling (net profit -67%). The main reasons are high prices for raw materials, weak demand and lower revenues from by—products. The company is betting on long-term investments to improve efficiency, but restoring profitability will depend on lower timber prices and a revitalized construction sector.   This case shows that in the current conditions, a simple increase in production is not a panacea. The key to success is cost control and product portfolio diversification.

Tags: #finland_forest_industry #Koskisen #lumber #finance_results #wood costs #market

Edited Moderator (Aug. 16, 2026 17:40:26)